(MENAFN) Fourteen years ago, the International Monetary Fund issued a recommendation to the Palestinian government, then led by Salam Fayyad, emphasizing the necessity of controlling the wage bill for state employees and retirees. At that time, the wage bill accounted for around 55 percent of the total Palestinian financial revenues. However, in a concerning development, this figure has surged to over 80 percent of total revenues today.
During a press conference attended by an Anadolu correspondent on February 14, Palestinian Finance Minister Shukri Bishara shed light on the magnitude of the issue, revealing that the current wage bill stands at a staggering one billion shekels per month (equivalent to USD272 million). This substantial sum is distributed among approximately 245,000 beneficiaries, encompassing 144,000 civil and military employees actively engaged in their respective roles. The remainder of the beneficiaries includes retirees, recipients of social allowances, as well as allowances allocated to prisoners, ex-prisoners, and families of martyrs.
Analysis of Palestinian budget data underscores the gravity of the situation, indicating that total financial revenues typically range between 1.35-1.4 billion shekels (USD367-380 million) per month under normal circumstances. The exponential increase in the wage bill has sparked concerns about the sustainability of public finances and the government's ability to effectively manage its fiscal responsibilities.
As the wage bill continues to swell, it poses significant challenges to the Palestinian Authority's fiscal stability and economic resilience. Addressing this escalating crisis requires concerted efforts to implement measures aimed at curbing expenditure, enhancing revenue generation, and fostering greater efficiency in financial management practices. The Finance Minister's remarks serve as a stark reminder of the urgent need for strategic interventions to mitigate the adverse effects of the burgeoning wage bill and safeguard the financial well-being of the Palestinian territories.
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